The Coming Executive Compensation Dust-Up

With annual meeting season almost upon us, it is striking how many ballots list shareholder input to executive compensation as one of  the items requiring a vote.  Not too surprisingly, management is generally not recommending support of these initiatives, but what if there were a few companies whose shareholders voted in favor?  Will they also endorse Lloyd Blankfein’s prescription for banking bonuses, allowing for a “clawback” system over multiple years?  We shall have to await events but the prospect of such an evolution suggests interesting new ways in which CEOs and other senior managers will have to market their performance directly to shareholders to prove they are worth their paycheck.  In light of  the many uncertainties governing financial returns, will this put management more squarely behind non-financial performance metrics such as sustainability and reputation?

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